Case Study: Southwest Airlines

Southwest Airlines is a major US airline established in 1967 that services a multitude of cities in all 50 states and beyond. The company is known for its outstanding quality in providing services and it 's cost effective ticket prices to its many passengers throughout the nation. This airline is based in the southwestern United States, in the city of Dallas Texas, and due to the tremendous number of airplanes that it has and the timely service that it provides to its passengers, this airline services more US passengers than any other airline. This airline also has the largest fleet of planes of any economical or low-cost airline service in the world and employees more than 45,000.

Southwest Airlines is a passenger airline company that arranges and provides scheduled flights for passenger and transportation freight services. The company mainly provides, low-fare, point-to-point services all over the US and near-international markets. The headquarters is located in Dallas, Texas and as of December 2014, the company employed over 46,278 people. The company was founded by Rollin King and Herb Kelleher in 1971. Southwest was the first airline to introduce the frequent mile program. This took place in the mid 1980’s. This type of program allowed passengers to add up traveled miles to use later as credit on a future airline ticket. The traveled miles would add up and would also reduce the price of a ticket. Southwest created the idea of senior discount, fun fares and the fun packs. These were perks that attracted people from different age groups. When Southwest originally was incorporated, the idea was to operate in three cities in Texas, but after taking over Morris Air and TranStar in 1987, this gave them a cutting advantage in the airline industry.

Southwest Airlines Co., established in 1971 by Rollin King and Herb Kelleher, began its operations with only three Boeing 737 aircrafts. It is headquartered in Dallas, Texas(Hawkins, Misra, & Tang, 2012). Southwest is well known as one of the largest low-cost carriers. With this strategy, the company has dramatically grown up and deeply rooted in the US airline industry. Now, Southwest Airlines Co. operates 633 aircrafts to 93 domestic cities and the highest number of passengers used Southwest Airlines to fly around U.S in Jan 2014 (Hawkins, Misra, & Tang, 2012). To accomplish more than 40th consecutive years of both profitability and competitiveness, Southwest Airlines Company is constantly trying to find the routes to differentiate itself from other domestic carriers (Hawkins, Misra, & Tang, 2012).

Southwest Airlines also has flexible policies to ensure customers have a great experience. An example of their flexible policies is you can cancel a reservation up to 30 minutes prior to the flights take off. Southwest also have rewards programs that consist of earning points, points for purchasing flights that customers can use to purchase booked flights. It also has a partnership with Chase Bank and offers customers a Southwest credit card that allows them to accumulate points that they can redeem for future flights (Investopedia, 2015). Southwest also price matches on airline tickets. The competitive tactics that this airline is using are very effective price matching on the airline

Southwest Airlines is excellent in planning out their long-term goals. The above SWOT analysis proved that the company is successfully carrying out the cost leadership strategy to manipulate their competitors and boost up their company. Their mission in providing Low Fare cost is one of the best strategy that they can have to increase their market share, but not just that it also put a significant increase in the demand of air travel. Southwest Airline rapid rewards program is brilliant, so they should continue and expand it even more.

While Southwest Airlines has increased their global distribution system network in recent years, there are still areas

As the low-cost leader, Southwest spends an inordinate amount of time focusing on its mission, vision, culture, and goals. This concentration allows Southwest to rank as one of the 100 Best Companies to work for in America. The employee’s attitudes and efforts lead to fewer customer complaints and more on-time arrivals and departures.

In terms of the captured US market share, Southwest Airlines are the second largest air carrier on the domestic market.

Southwest Airlines Co. is an airline company that offers air transportation services within the United States and in international markets. The company operates within the airline industry that is highly regulated, technology intensive, labor intensive, and highly competitive (Southwest Airlines, 2017). Southwest Airlines operates a service business whereby the company offers a point to point air transport service to its passengers. Other than passenger transport, the company offers transportation services for pets and unaccompanied minors. The flights offered include short haul and long haul between various destinations within the United States and internationally. In 2016, the company’s operating revenues from international operations amounted to $383 million. A unique feature of the Southwest Airlines is its cost structure whereby the company focuses on cost discipline and uses one aircraft type to minimize costs.

Southwest Airlines is the industry leader in low cost airfare. They began its operation in 1971 with three Texas based routes and began interstate routes in 1978. When Southwest entered the market in 1971 they employed a market penetration pricing approach. They wanted to provide the best service for the lowest possible price. They saw that if they cut out certain unnecessary benefits they could lower their ticket price to a level far below that of the competition. They do not have in flight movies, meals, or first class sections. This strategy has been very cost effective and Southwest passes the savings on to the customer. They chose to focus on pleasure travelers and low-income travelers opposed to business travelers. This allowed them

I have flown Southwest several times and, by far, they have been my favorite airline. First, the fares are low compared to other airlines, the customer service is excellent, and I feel safe, comfortable and enjoy my flying experience every time. Southwest has a good record of reliability of being on departing and arriving on time compared to other airlines. As other airlines began to charge extra fees for checked baggage, Southwest continued to offer 2 free checked bags per customer. When my family flew another airline, we were shocked to see the extra $80 each way in additional baggage charges. Since that time, I always fly

Southwest Airlines has a friendly culture and a people oriented-leadership. The leader of Southwest treat employees as family member and friends. The whole company not just focus on the

This exercise demonstrates the importance of social media and how it can have an impact of customer relationships. There were well aware of the commitment to customer satisfaction. In fact, they came in last in this category when compared to other airlines. That quickly turned around after an incident in February of 2007. The company then started to use social media platforms such as Twitter, YouTube, and Facebook to better communicate with their customers. As a result, they have rebuilt and improved their relationship with their customers. They seem to be more concerned about brand building than sales.

Southwest Airlines has been making changes over the past few years that helped them become the largest low-cost carrier in the United States. Most other airlines have been struggling to make it through this economy, but Southwest has found a way to thrive. The airline has dropped their prices and eliminated fees for extras that have allowed them to fill up most flights. One cost they continue to struggle with is offsetting the increasing fuel prices. This has caused some airlines to merge or sell the company to competitors.

This, along with the fleet maintenance costs and gate acquisition costs are unavoidable costs. The main challenge for Southwest is to optimize its operations such as to make maximum utilization of resources and thus cut back on the operating costs. The practice of paying salaries higher than the industry average is also a concern because the employees now expect such benefits from the airlines.